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The International Monetary Fund (IMF) gave its approval, Monday, August 29, for a loan of approximately 1.1 billion dollars for Pakistan. Help comes at the right time for the country which is fighting against historic floods and which is facing a serious economic crisis.
This long-negotiated IMF loan is a breath of fresh air for Pakistan, which is facing floods that submerged a third of the territory. The institution had already granted, in 2019, a loan of 6 billion dollars as part of a rescue plan concluded with Imran Khan, then Prime Minister.
In addition to this new sum of 1.1 billion dollars, the IMF will add another 500 million dollars in its support effort which must extend until June 2023. But Pakistan will need much more.
According to the Minister of Planning and Development, 10 billion dollars would be needed to repair the damage caused by the monsoon rains to housing and other infrastructure, but also to agriculture. The United Nations has also launched a urgent appeal for donations, up to 160 million dollarsto help the more than five million victims on the spot.
These floods come at the worst time for Pakistan, plunged into a serious economic crisis which is reflected in galloping inflation, a devaluation of its currency, the rupee, and a considerable drop in foreign exchange reserves. The latter are essential for the payment of imports and the repayment of a very high debt. The country of some 222 million people is on the verge of bankruptcy.